Foreign currency in a nutshell
- a floating system - used by countries like the USA, Australia and England, where market factors (supply & demand, foreign investment, imports etc) determine the exchange rate
- a pegged system - used by countries like Cuba, Hong Kong and the UAE, where the currency is pegged (or fixed) to another country's currency, usually the US dollar
Do you watch the news in the mornings and see the Aussie dollar going up or down against the USD, the EUR and the GBP? Do you wonder why the rates shown at Travel Money Oz stores, or on our website (or those shown by any other foreign exchange provider) are different to what you saw on TV that morning?
The difference lies in the rates being wholesale or retail rates.
On the TV you see wholesale rate - the rates available to large financial institutions and companies buying and selling millions of dollars of foreign exchange. The rate you see from us is the retail rate - that is the rate that local banks and foreign exchange companies charge to individuals wanting to buy or sell foreign currency.